Competitive versus efficient extraction of a common property resource: The groundwater case

Rubio, Santiago J.; Casino, Begoña

doi:10.1016/s0165-1889(99)00047-0

Cited by 74 publications

(62 citation statements)

References 25 publications

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“…5 Thus, as long as λ iSS and β iSS remain negative, which they should since they are the same for all players and it would not make sense for lift or contamination to be seen as "good" for everyone, …rst order conditions indicate that both steady state contamination and steady state lift will be between the myopic and the optimal values. This result is similar to other results in the literature (see for example Rubio and Casino (2001), Xepapadeas (1995)). …”

Section: Symmetric Modelsupporting

confidence: 93%

“…The simplest case is that of linear Markov strategies, which although it is rather crude can be a sensible assumption in certain circumstances, namely when the dynamic game has a linear quadratic structure. Rubio and Casino (2001) discuss the use of nonlinear strategies in a quantity-only groundwater management problem and conclude that, given restricted initial conditions (such as a natural hydrologic steady state), the linear strategy may perform better since it may be the only strategy that leads to a stable steady state. 4 In the present case, with two control and two state variables, and considering the nature of the agent's problem, it will be assumed that the relevant linear strategies for each player i consist, in each moment t, of…”

Section: Symmetric Modelmentioning

confidence: 99%

“…The case of groundwater management in particular has been dealt with in Xepapadeas (1996), which considers a quantity-quality problem where contamination depends only on the amount of water pumped, in Provencher and Burt (1993), which analyses the impact of strategical behavior on the e¢ciency of the common property solution, and in Rubio and Casino (2001), which contains a quantity-only management model and investigates nonlinear feedback strategies. All of these papers consider symmetrical water users and most establish myopic and optimal solutions as extremes, with feedback solutions somewhere in between.…”

Section: Introductionmentioning

confidence: 99%

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Strategic Games in Groundwater Management

Roseta-Palma¹,

Brasão²

2004

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Previous work has shown that quality-quantity interactions may alter the typical results of private management under the assumption of myopic behavior. The main objective of the paper is to analyse the role of feedback strategies in a model containing an integrated quantity-quality approach, analyzing the impact on water use, pollution and shadow resource prices.The case of symmetric players is shown to yield results that are similar to those of models in previous literature, in that it establishes myopic and optimal solutions as extremes, with feedback solutions somewhere in between. However, as di¤erent water users do not have similar objectives or constraints, it is important to consider the case of asymmetric players. This paper shows that when agents are asymmetric, especially as regards external e¤ects, strategic solutions can be more extreme than the myopic ones.

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Section: Symmetric Modelsupporting

confidence: 93%

Section: Symmetric Modelmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

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Strategic Games in Groundwater Management

Roseta-Palma¹,

Brasão²

2004

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“…However, it should be noted that, although convenient, it is only an approximation for the true objective of the social planner that should consider the gross consumer surplus from water consumption instead of the revenue from water sales in the objective function. As the consumers are often farmers, the water demand function is equal to the value of the marginal productivity of water that is decreasing [see Gisser and Sánchez, 1980;Neher, 1990;Rubio and Casino, 2001]. Following Rubio and Casino [2001], the objective function of the manager would be:…”

Section: More Accurate Decision Makingmentioning

confidence: 99%

Optimal extraction from a renewable groundwater aquifer with stochastic recharge

Zeitouni

2004

Water Resources Research

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[1] This work considers the management of an aquifer with stochastic recharge and finite boundaries. For a class of such models we show that there is a positive threshold of the water stock that the manager should aim at keeping. Thus, under the optimal extraction regime at a time when the water stock is lower than this threshold, there should be no pumping from the aquifer, while at times when the water stock is greater than the threshold, all water in excess of the threshold level should be pumped. The threshold level happens to coincide with the aquifer boundary for sufficiently high unit cost of pumping, in which case, only the runoff water of excess recharge should be collected.

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“…Burt (1964), Castro, Martinez andRubio (1994), Rubio and Casino (1999), etc., usually involve a partial equilibrium analysis. Importance has been given to the definition of the property rights, since the optimal management policy depends crucially on it.…”

Section: Theoretical Framework and The Social Optimummentioning

confidence: 99%

Mixture and Distribution of Different Water Qualities: An Experiment on Alternative Scenarios Concerning Vertical Structure in a Complex Market

et al. 2001

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We set up a model of water management, which is inspired by the possibility of mixing water of different qualities. Water is supplied to two types of consumers with different preferences for water quality and quantity. A distributional knot may exist which optimally distributes the supplied water in the downstream market. Different scenarios compare experimentally the advantages of a centralized versus a decentralized resource management. We conducted experiments with 14 markets in three different settings, labelled as "upstream monopoly", "upstream duopoly" and "duopoly-monopsony". We find that a two-product monopoly performs better than the duopoly regarding social welfare and volatility with respect to prices and production. Especially, the centralization of information enhances learning in the market considered. An interesting observation is that monopolistic subjects post much lower price offers at the outset of the experiment than duopolists do. However, in the course of the experiment production is lower and prices are higher in the monopolistic structure. In the duopoly-monopsony case, monopsonistic subjects failed to exercise market power and market prices did not reflect correctly the differences in qualities. Nevertheless, increased upstream competition and downstream market power helped to mitigate the waste of resources in the economy.3

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Competitive versus efficient extraction of a common property resource: The groundwater case

Cited by 74 publications

References 25 publications

Strategic Games in Groundwater Management

Strategic Games in Groundwater Management

Optimal extraction from a renewable groundwater aquifer with stochastic recharge

Mixture and Distribution of Different Water Qualities: An Experiment on Alternative Scenarios Concerning Vertical Structure in a Complex Market

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